nrj
New Member
- Joined
- Nov 16, 2009
- Messages
- 9,658
- Likes
- 3,911
Shipbuilding – the key to industrial growth
Modern shipbuilding was taken up in India only after independence, and it grew mainly by augmenting repair yards. Even though major initiatives were taken for industrialization of the nation, and despite the fact that most of the worlds industrialized nations had attained a position of eminence in shipbuilding at some point of their industrial growth, the Indian shipbuilding industry's growth has remained largely lackadaisical, especially when compared with East Asia and China. A vibrant shipbuilding industry spurs industrial growth in almost all other sectors, ranging from steel, and heavy industry to electronics and IT, thereby greatly increasing employment and national income. This assumes urgency, considering that 10 million Indians will enter the job market every year for the next 15 years. So what is required to bring about the desired vibrancy in shipbuilding? We are faced with a chicken and egg situation. For Indian shipbuilding to promote all round industrialization, it needs to grow, and achieve what could be termed a critical mass by way of new buildings. Only then will Indian shipyards will become 'big buyers' and command favourable prices, commercial terms and delivery periods from suppliers. This would eventually generate favourable conditions for investment in equipment and ancillary industries.
For shipbuilding to flourish the essentials are efficient facilities, capable human resources and, above all, orders for ships. With regard to orders, shipowners tend to gravitate towards builders with a large reference lists of timely deliveries of quality ships. So how do Indian shipyards attract buyers away from Japan, Korea and now China, especially in today's depressed conditions? It can be done only by quoting a price sufficiently lower than that of the established giants, so that the buyer is willing to take a risk or chance and place orders with them. This is the route that was followed by Japan to wean away orders from Europe, and the lesson was not lost on the Koreans and Chinese. Korean yards have now become the builders of choice. Government shipbuilding subsidies, as a deliberate policy, is the time tested means of kickstarting the process and moving towards self sustainment. Subsidies were in place in India till 2007, when they were withdrawn. The withdrawal happened to coincide with the sudden collapse of the worldwide shipbuilding boom, dealing our yards a double whammy. Recently, subsidy has been approved for orders placed upto August 2007, ie the date that the subsidy scheme was suspended, but the future policy remains unfinalised. However, the some support for shipbuilding is expected in the policy being finalized by the NMCC (National Manufacturing Competitiveness Council), such as government preference for Indian built and Indian flagged vessels. The hon'ble Minister of Defence has also stated that in future, all naval ships are to be built in India.
Indian shipyards have improved their facilities, and substantial investments have been made by the private industry in recent years. However, facilities by themselves, would in all likelihood not yield desired results, especially for naval ships. The recent approval by the CCS of the norms for forming joint ventures between Defence PSUs and the private industry will hopefully clear the way for JVs between defence and private shipyards, thereby marrying the experience and expertise of the former with the capacity and facilities of the latter. If well managed, such arrangements could accelerate the indigenous shipbuilding programmes of the Navy and Coast Guard. Also, large value defence imports are on the anvil and successful suppliers will have substantial offset obligations. Allowing creation of Greenfield shipyards with larger quantum of FDI, as an offset could also be considered as a viable route to increasing indigenous capacity.
Quality human resources are vital for the shipbuilding industry. However, national training facilities presently do not measure up to task of providing training comparable with that available in leading shipbuilding countries. Here again, achieving the critical mass would probably lead to improvement in training facilities.
No discussion on shipbuilding can be complete without dwelling on ship design. While the Indian Navy had the foresight to set up in-house capability for warship design, other governmental institutions like the NSRDC have not developed as intended. It is indeed heartening to see the setting up of private ship design organizations. However, design requires knowledge and experience in equal measure, and it would be useful for stakeholders to evolve HR policies which attract the best talent, preferably with appropriate shipperating experience, and also reduce turbulence resulting from tenured incumbents. The time for a policy review is opportune, particularly in view of the Navy training all its new induction officers in engineering specializations.
By Vice Admiral Birinder Singh Randhawa, PVSM AVSM VSM
Source
Modern shipbuilding was taken up in India only after independence, and it grew mainly by augmenting repair yards. Even though major initiatives were taken for industrialization of the nation, and despite the fact that most of the worlds industrialized nations had attained a position of eminence in shipbuilding at some point of their industrial growth, the Indian shipbuilding industry's growth has remained largely lackadaisical, especially when compared with East Asia and China. A vibrant shipbuilding industry spurs industrial growth in almost all other sectors, ranging from steel, and heavy industry to electronics and IT, thereby greatly increasing employment and national income. This assumes urgency, considering that 10 million Indians will enter the job market every year for the next 15 years. So what is required to bring about the desired vibrancy in shipbuilding? We are faced with a chicken and egg situation. For Indian shipbuilding to promote all round industrialization, it needs to grow, and achieve what could be termed a critical mass by way of new buildings. Only then will Indian shipyards will become 'big buyers' and command favourable prices, commercial terms and delivery periods from suppliers. This would eventually generate favourable conditions for investment in equipment and ancillary industries.
For shipbuilding to flourish the essentials are efficient facilities, capable human resources and, above all, orders for ships. With regard to orders, shipowners tend to gravitate towards builders with a large reference lists of timely deliveries of quality ships. So how do Indian shipyards attract buyers away from Japan, Korea and now China, especially in today's depressed conditions? It can be done only by quoting a price sufficiently lower than that of the established giants, so that the buyer is willing to take a risk or chance and place orders with them. This is the route that was followed by Japan to wean away orders from Europe, and the lesson was not lost on the Koreans and Chinese. Korean yards have now become the builders of choice. Government shipbuilding subsidies, as a deliberate policy, is the time tested means of kickstarting the process and moving towards self sustainment. Subsidies were in place in India till 2007, when they were withdrawn. The withdrawal happened to coincide with the sudden collapse of the worldwide shipbuilding boom, dealing our yards a double whammy. Recently, subsidy has been approved for orders placed upto August 2007, ie the date that the subsidy scheme was suspended, but the future policy remains unfinalised. However, the some support for shipbuilding is expected in the policy being finalized by the NMCC (National Manufacturing Competitiveness Council), such as government preference for Indian built and Indian flagged vessels. The hon'ble Minister of Defence has also stated that in future, all naval ships are to be built in India.
Indian shipyards have improved their facilities, and substantial investments have been made by the private industry in recent years. However, facilities by themselves, would in all likelihood not yield desired results, especially for naval ships. The recent approval by the CCS of the norms for forming joint ventures between Defence PSUs and the private industry will hopefully clear the way for JVs between defence and private shipyards, thereby marrying the experience and expertise of the former with the capacity and facilities of the latter. If well managed, such arrangements could accelerate the indigenous shipbuilding programmes of the Navy and Coast Guard. Also, large value defence imports are on the anvil and successful suppliers will have substantial offset obligations. Allowing creation of Greenfield shipyards with larger quantum of FDI, as an offset could also be considered as a viable route to increasing indigenous capacity.
Quality human resources are vital for the shipbuilding industry. However, national training facilities presently do not measure up to task of providing training comparable with that available in leading shipbuilding countries. Here again, achieving the critical mass would probably lead to improvement in training facilities.
No discussion on shipbuilding can be complete without dwelling on ship design. While the Indian Navy had the foresight to set up in-house capability for warship design, other governmental institutions like the NSRDC have not developed as intended. It is indeed heartening to see the setting up of private ship design organizations. However, design requires knowledge and experience in equal measure, and it would be useful for stakeholders to evolve HR policies which attract the best talent, preferably with appropriate shipperating experience, and also reduce turbulence resulting from tenured incumbents. The time for a policy review is opportune, particularly in view of the Navy training all its new induction officers in engineering specializations.
By Vice Admiral Birinder Singh Randhawa, PVSM AVSM VSM
Source
